Plea for Refund of Additional Levy under Coal Mines Act; Delhi HC issues notice

Finance Act - Delhi High Court - taxscan

The Delhi High Court today issued a notice to the ministries of Coal and Law requiring their response with regard to the refund claim of Jindal power ltd. Recently, the Company had approached the High Court challenging the provisions of the Coal Mines Act, as per which the additional levy taking part in the coal auction is mandatory. The petitioners further sought for refund of around Rs 1185 crore paid by them as additional levy as per the Act. The government

The company contended that the government cannot impose any such levy without first adjudicating the issue and sought that the provisions in the Act which provided for such levy be declared ultra vires of the Constitution.

In the said petition, the company also assailed a 2012-13 report of Comptroller and Auditor General (CAG) to the extent it calculated that there was a net gain of Rs 295 per metric tonne (PMT) of coal to allottees who operated the blocks. The CAG report had also estimated a financial gain of Rs 1.86 lakh crore to prior private allottees.

According to the petitioners, it was allocated Gare Palma IV/2 and IV/3 blocks at Raigarh in Chhattisgarh to meet its requirement for running a 1000 mega watt power plant there. In the year 2014, the Supreme Court had cancelled allocation of 214 coal blocks, including those of the petitoners. However, the petitioners, under protest, paid the entire amount.

The company opposed the figure of Rs 295 PMT calculated as net gain by CAG, alleging that the report of the auditing body “fails to show any intelligible differentia of coal alloted or nature of mines”.

The petition further claims that the CAG audit was carried out without any direction from the President, Governor or Administrator, as required under the law and sought that the report be declared as unlawful and ultra vires.